Friday Financial Five
Friday, March 29, 2013
Housing numbers leap
According to the RIAR, Rhode Island saw a nearly 12 percent jump in February in the median price of single family homes, increasing to $189,500 from $170,000. Supplies are getting tighter, but there is still an active lending market, as interest rates were recently pushed to a seven month high. Even the condo market is finally showing signs of life. These are all good indications that we could see some serious movement as the busy season begins in real estate.
Non-deductible IRAs to Roths
As a last minute tax planning suggestion, employees that don’t have a company retirement plan available and make too much money to deduct IRA contributions should consider making a non-deductible IRA contribution. Since there is no income limitation to Roth conversion, you can convert the non-deductible IRA contribution to a Roth with no tax consequence. You should have this contribution in before April 15th for tax year 2012.
Women and wealth
April 1st and the Required Minimum Distribution
If you turned 70 and a ½ in 2012, this Monday, April 1st, is the day that you need to start taking mandatory payouts from any traditional IRAs. If you fail to take at least the minimum withdrawal amount by April 1, the IRS may hit you with a penalty equal to 50% of the shortfall. These withdrawals will affect your tax bill for the year, so make sure you plan accordingly.
Florida Gulf Coast and Rhode Island
There’s a new reason for our state’s workers to spend their retirement years in the warmth of Florida’s sun and lack of state income tax. The Rhode Islander filled retirement communities in Naples and nearby areas have adopted Florida Gulf Coast University, the surprise success story out of this year’s NCAA basketball tournament. But can FGCU keep their hugely successful coach, Andy Enfield? He currently makes $157,500, though the school is allegedly trying to double that amount. Would Coach Enfield turn down $1 million plus to coach the likes of UCLA? The economics of coaching and history say no.
Dan Forbes is a regular contributor on financial issues. He is a CFP Board Ambassador. He leads the firm Forbes Financial Planning, Inc in Providence, RI and can be reached at [email protected].